BUNKER FUELS UNDER SCRUTINY AT SHIPPING, CLIMATE MEETINGS

Greenhouse gases emitted by ships -- which carry the majority of the world's traded goods -- have recently come into the spotlight, and pressure is mounting for action to address the contribution to climate change from this sector.

At climate change negotiations under the auspices of the UN Framework Convention on Climate Change (UNFCCC) in Bangkok, which wrapped up on 4 April (see Bridges Weekly, 11 April 2008, http://www.ictsd.org/weekly/08-04-11/story3.htm), negotiators re-engaged with the issue of bunker fuels -- fuels used for international transport, including both shipping and aviation. The topic had been held in abeyance for several years in this forum.

Meanwhile, the Marine Environmental Protection Committee (MEPC) of the International Maritime Organisation (IMO) tackled climate issues head-on at a meeting in London, also held from 31 March to 4 April.

Bunker fuels back on the agenda

During the Bangkok negotiations, participants discussed bunker fuels during an in-session workshop focusing on emissions sectors. They considered whether, and what, action should be taken in the second Kyoto commitment period after 2012. Norway, a country that has been an active player in this area, proposed considering emissions trading schemes or carbon taxes for bunker fuels, with revenues channelled to adaptation in developing countries.

While many participants agreed on the need to act on shipping and aviation emissions, some countries in remote geographic locations raised specific concerns. Some of the most vulnerable developing countries might be disproportionately affected by higher transport fuel prices, as they rely on long-distance freight to participate in international trade. Tourism represents a significant source of income in some countries, and is also sensitive to increases in travel costs. Some participants raised the issue of how the principle of common but differential responsibilities could be operationalised in this context.

In the discussions, countries disagreed on whether the UNFCCC was the correct venue to address the issue, with the EU, Norway, Brazil, Panama and India in favour of discussions at the UNFCCC. Others, including Australia, Japan and China were of the opinion that the IMO and ICAO should deal with bunker fuels. Participants agreed to continue discussions on possible mitigation efforts by Annex I (developed) parties in this area, recognising the roles of the IMO and ICAO (International Civil Aviation Organisation) however.

IMO moving ahead

Meanwhile in London, the IMO Marine Environmental Protection Committee MEPC discussed a report prepared by an inter-sessional Correspondence Group on Greenhouse Gas-related issues. Participants also considered proposals set forth by members and observer organisations on climate change. IMO Secretary-General Mr. Efthimios E. Mitropoulos suggested that the IMO expedite its work in this area, with the aim of establishing a coherent and comprehensive future IMO regulatory framework on greenhouse gas emissions from ships.

In terms of such a framework, the MEPC agreed on its basic principles. The framework should, among other, be binding and "equally applicable to all flag states in order to avoid evasion." It should be based on sustainable environmental development "without penalising global trade and growth." In the short term, members would consider a global levy scheme on marine bunker fuel. Other options could include harnessing wind power and reducing shipping speeds to burn less fuel, as well as measures to improve shipping control and operations from an energy-efficiency point of view.

In terms of next steps, Norway will host an inter-sessional workshop on greenhouse gas emissions from shipping from 23-27 June this year. The Correspondence Group on Greenhouse Gas-related issues will continue to operate. The IMO MEPC will complete its study of greenhouse gases next year, allowing for the preparation of an IMO position paper for the UNFCCC Copenhagen Conference in December 2009.

Commenting on the progress made at the meeting, Mitropoulos said "I am confident that, as we look beyond Kyoto, we should be able to put in place a robust regime that will apply fairly to shipping while, at the same time, achieving our main objective of protecting the marine and atmospheric environment."

The MEPC also approved new standards on emissions of sulphur oxides, particulate matter and nitrogen oxides from ships, following on from a meeting in February this year (see Bridges Trade Biores, 22 February 2008, http://www.ictsd.org/biores/08-02-22/story1.htm). Parties will now gradually reduce sulphur dioxides in shipping fuels. In 2012, allowed concentration will be at 3.5 percent maximum, dropping to 0.5 percent in 2020. Fuels used in certain sensitive areas will be subject to even stricter limits. Based on stricter standards for engines, nitrous oxides pollution from ships will also be reduced.

"This is a real ocean-sized change for the IMO," said Eelco Leemans of the North Sea Foundation. "After a decade and a half of discussion and pressure from environmentalists around the world, the IMO has recognised the need for clean shipping fuels."

Background

The worldwide fleet of 90,000 ships transports 90 percent of the world's goods. Shipping has grown by three percent annually on average over the last three decades, and shipping emissions are projected to grow by more than 70 percent by 2020, as global trade expands.

In the last couple of decades, the international community has taken steps to reduce emissions from other sectors, but the shipping industry has been left behind. Efficiency and environmental standards on shipping fuel have been largely ignored due to the distance between the ships and the externalities they create.

According to recent estimates, carbon dioxide emissions from ships are three times higher than previously calculated. According to Intertanko, the global association of tanker owners, annual emissions from the world's merchant fleet have already reached 1.12 billion tonnes of carbon dioxide, or nearly 4.5 percent of all global emissions. In addition, emissions are set to rise by a further 30 percent by 2020, and shipping will become one of the main sources of greenhouse gas emissions, following transport, housing, agriculture and industry.

ICTSD reporting; "IMO environment meeting approves revised regulations on ship emissions," IMO RELEASE, 9 April 2008; "Summary Of The First Session Of The Ad Hoc Working Group On Long-Term Cooperative Action And The Fifth Session Of The Ad Hoc Working Group On Further Commitments For Annex I Parties Under The Kyoto Protocol," EARTH NEGOTIATIONS BULLETIN, 7 April 2008.